Short answer: To get a California state cannabis license, you must provide proof of a bond covering the cost of destroying cannabis if a violation requires it (Business and Professions Code §26051.5(a)(10)), plus a landowner's written consent. If you have employees, workers' compensation is also required (Labor Code §3700). Liability and property insurance are usually required by your city permit or lease.
What the state license application requires
| Requirement | Source |
|---|---|
| Proof of a bond to cover the costs of destroying cannabis or cannabis products if a violation requires it, including the department's administrative, investigative and enforcement costs | B&P Code §26051.5(a)(10) |
| Evidence of the right to occupy the location and a landowner statement consenting to cannabis activity | §26051.5(a)(2) |
| Seller's permit number (or proof you've applied) | §26051.5(a)(6) |
| Labor peace agreement statement once you reach the employee thresholds in the statute | §26051.5(a)(5) |
| Workers' compensation if you have any employees | Labor Code §3700 |
Department of Cannabis Control regulations set the bond at no less than $5,000 per licensed premises, payable to the State of California and issued by a California-licensed corporate surety (4 CCR §15002; DCC Form 8113).
Coverage commonly required by contract or local permit
State statute doesn't list general liability limits for licensees, but these are routinely required by city permits, landlords and business partners:
- General liability, often with the landlord as additional insured
- Property and crop coverage for buildings, equipment, inventory and canopy
- Product liability for manufacturers and retailers
- Commercial auto and cargo for distributors
Checklist
- Line up the bond early. It's part of the application.
- Get landowner consent in writing that names cannabis activity.
- Read your city's permit conditions for its insurance limits.
- Add workers' comp before your first hire.
Related: cannabis insurance and who insures cannabis businesses in California.
Frequently asked questions
What bond does a California cannabis license require?
B&P Code §26051.5(a)(10) requires proof of a bond to cover the costs of destroying cannabis or cannabis products if a violation requires it. DCC regulations set it at no less than $5,000 per licensed premises.
Is insurance required for a cannabis license in California?
The state statute requires the bond and, if you have employees, workers' compensation. General liability and property insurance are usually required by your city permit or lease.
Does my landlord have to approve cannabis activity?
Yes. The application must include a statement from the landowner acknowledging and consenting to commercial cannabis activity on the property.
Do cannabis businesses need workers' comp?
Yes, if they have any employees, under Labor Code §3700.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. Not legal, tax or financial advice, and not a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.